Rothschilds to Combine French and British Assets

Peter Foley/Bloomberg NewsDavid de Rothschild will become chairman of PO Gestion, a limited partnership that will control the newly combined firm.

LONDON — One of Europe’s oldest banking dynasties is changing to maintain its grip on an institution dating back to the 18th century.

The Rothschild family is to consolidate its French and British operations in a move to increase capital reserves and operational efficiency while securing control of the firm.

The deal will see Paris Orléans, the Rothschild Group’s holding company, buy the minority stakes in its subsidiaries, including N.M. Rothschild & Sons, the investment bank based in London, and the group’s French asset management business, according to a company statement released on Wednesday.

The combined firm will also take on a French limited partnership structure, which has been used by other family-run businesses, including the luxury goods manufacturer Hermès, to ward off potential takeovers.

The reorganization is expected to be completed by the end of June.

The changes come as regulators are requiring European banks to increase their capital reserves and reduce financial risks. The company said the new structure would increase operational efficiencies across its businesses, which include financial advisory services, and wealth and asset management.

The reorganization would also improve the capital position of Paris Orléans in connection with the new regulatory requirements, known as Basel III, according to a company statement.

David de Rothschild will become chairman of PO Gestion, a limited partnership that will control the newly combined firm.

‘‘It will allow the group to meet better the requirements of globalization in general and in our competitive environment in particular, while ensuring my family’s control of the group over the long term,’’ he said in a statement.

Nigel Higgins, the current chief executive of the Rothschild Group, and Olivier Pécoux, the head of Paris Orléans, will be co-chief executives of the new group.

Under the terms of the deal, Paris Orléans will combine Rothschild & Cie Banque, the group’s French businesses, with Rothschilds Continuation Holdings, a company based in Switzerland that controls the firm’s international holdings.

Paris Orléans, which has a market value of 550 million euros ($719 million), will offer minority shareholders 17 euros a share for their stakes in the company, 4 percent above the firm’s closing price on Wednesday.

Allianz, the German insurance and asset management company, said it would remain a long-term shareholder in Paris Orléans.